[The Convergence of NEC and Sumitomo]
Hi Pat, I dug this up from NEC's Web Page. Their involvement makes a little more sense to me, but further clarification welcomed.
Steve
**** For immediate use March 31, 1997
NEC and Sumitomo Bank to invest $60 million in new Silicon Valley capital firm
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In a continuing move to advance the pace of new technology development, multimedia giant NEC Corporation (NEC) and Sumitomo Bank today announced their establishment, effective April 2, of a $60 million initial limited partnership fund , to be managed by Convergence Partners, L.P, the newest autonomous venture capital firm in Silicon Valley. NEC, through its affiliate NEC USA, will contribute 74.25% of the fund, with 24.75% from Sumitomo Bank and 1% coming from the new company.
Lead by prominent high technology investment professionals, Convergence Partners will focus on equity investments in high technology products and services, particularly in the three fields that are key to NEC's broad vision of multimedia: computers, communications and electron devices. Convergence Partners will also establish and advance relationships with high technology entrepreneurial ventures, providing them with strategic counsel.
Additionally, NEC USA, Inc. (NEC USA) will establish a venture liaison organization in Silicon Valley, to assist and enable young and upcoming companies to have more appropriate access to NEC. Sumitomo Bank is also planning to take advantage of this effort and base staff at the office.
This liaison office is expected to maintain close links with Convergence Partners, as well as to develop relations with Silicon Valley venture enterprises. Such companies have proved important in creating new business fields based on information technologies, and are expected to develop other new, exciting business possibilities. An increasingly vital factor in this activity has been the role of venture capitalists, which Japan is now coming to appreciate more fully.
In announcing the creation of the 'Convergence Ventures I Fund', Yoshihiro Suzuki, NEC Senior Executive Vice President, stated,
"The venture investment model associated with funding ventures in the dynamic sectors of high technology is truly a phenomenon. As a global business leader and a pioneer of innovative technologies that span almost a century, NEC needs to participate in that phenomenon."
To observe these venture businesses, NEC and Sumitomo Bank sought out to form an autonomous investment management team, a first among Japanese companies. Heading the team as managing general partner is Paul Dali, formerly general partner of the California office of venture capital firm Nazem & Company. Alongside him will be Eric Di Benedetto, who managed the US venture capital operations of BANEXI, the merchant banking arm of Banque Nationale de Paris (BNP), and Russ Irwin an associate senior vice president of NEC USA. These highly regarded Silicon Valley investment professionals bring with them tremendous experience in technology, marketing, investment management and international finance.
Commenting on the establishment of Convergence Partners, Dali said of NEC and Sumitomo Bank,
"They are creating a new model for corporate venture investments that is quite forward-looking. Although many large companies have their own in-house investment program, it is unique for a corporation to create and entrust the autonomous management of investments in leading-edge technology to an independent, outside firm. It speaks of their commitment to the advancement of technology, as well as their desire to participate in the exciting opportunities presented by US entrepreneurs."
Through their relationships with North America's communications, computer, electron devices, software, information processing and multimedia industries, NEC and Sumitomo Bank hope to discover promising new enterprises and encourage symbiosis among them. Furthermore, the two partners aim to build and expand collaborative structures among venture companies and accelerate their efforts to bring exciting, promising new technologies to market.
Both NEC and Sumitomo Bank intend to put a greater focus on efforts to track developments in fast-paced Silicon Valley, particularly focusing on innovative thinking and technological know-how, to achieve high returns on the investments they make.
Background
In November 1994, NEC USA established the Office of Multimedia Business Development, followed by Obtech, LLC to pursue object based systems integration in March, 1996. In July, 1996, NEC established HolonTech, Corp. to develop Internet-based work systems for small office/home office (SOHO) applications, as well as establishing several other strategic links with Silicon Valley venture firms.
Through these organizations, NEC has helped companies bring the technologies they hold to the market. Moreover they provide a valuable understanding of the rapidly changing environment of Silicon Valley, and research into the vital factors behind the success of venture firms.
The creation of the Convergence Ventures Fund and NEC USA's liaison office will help NEC and Sumitomo Bank build a bridge that is expected to create better cooperation with players in the US information technologies markets, as well as lead to opportunities in new business fields.
NEC Corporation is the only company in the world to be counted among the top five ranking companies in three key technological fields it sees as vital to success in its vision of multimedia: computers, communications and electron devices. By combining its technologies in these areas, NEC is at the forefront of multimedia developments today. Employing 152,719 employees around the world, NEC saw net sales in 1995-96 amount to <Picture: YEN>4,397 billion (US$41.1 billion), a 17% increase on the previous year.
NEC USA is a holding company for NEC's high technology enterprises in North America, whose combined annual revenues exceed $5 billion. Its commercial subsidiaries consist of NEC America, NEC Electronics and NEC Technologies. NEC USA also operates the Office of Multimedia Business Development, C&C Research Laboratories and NEC Research Institute.
For Outline of Convergence Partners, please see the attached sheet.
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